Over the years, oil has been one of the major cornerstones of the European economy. However, with the changing times fueled by digital innovations, artificial intelligence could soon begin to contribute significantly to Europe’s economy, following the growth trajectory of the AI market in the continent.
The AI market in Europe has been experiencing exponential growth for the past two years, at least. In 2023, the market size reached $22.8 billion and is expected to reach up to $184 billion by 2032, with a compound annual growth rate (CAGR) of 25.32% from 2024 to 2032, according to data from IMARC Group.
Spherical Insight even predicted a much higher size of $325.29 billion by 2032, growing at a CAGR of 25.7% from 2022 to 2032.
Artificial Intelligence Presents a $651 Billion in GVA Opportunity for Europe?
The growth in the European AI market seen in recent times has largely been marked by many advances in AI research, project developments, investments, progress with the landmark EU AI Act, and, most importantly, a growing level of adoption among businesses in the region.
A report by Amazon in February noted that a third of European businesses have adopted AI, representing a 32% growth rate over the past year. The e-commerce giant then predicted that the current level of growth in the market could contribute over $651 billion (€600 billion) in gross value added (GVA) to the European economy by 2030 if maintained.
Besides adoption, one other key insight that points to the potential explosion of the European AI market in the coming years is the growing rate of spending in the market.
AI Spending in Europe Set to Reach $47.6 Billion in 2024
Europe already represents around one-fifth of the global AI market in terms of spending, according to International Data Corporation (IDC), which forecasts that the European market will claim more share of global AI spending in the coming years, particularly on GenAI.
In its report on “Worldwide AI and Generative AI Spending Guide,” IDC said Europe’s AI and GenAI market will reach nearly $47.6 billion in spending this year, with a compound annual growth rate (CAGR) of 33.7% from 2022 to 2027
GenAI is one sector expected to boom in 2024 and beyond. While it only represented 9.6% of the total European AI spending in 2023, IDC forecasted that Europe’s GenAI market could grow more than three times faster in spending compared to the rest of the AI markets.
Banking, retail, and software and information service providers will be the biggest spenders in Europe in the market, according to the report.
